Weave Communications (NYSE: WEAV) FY Conference Summary Industry Overview - Weave operates in the SMB healthcare sector, providing communication engagement software primarily for dental, optometry, veterinary, and specialty medical practices [4][10]. Core Points and Arguments 1. **AI Integration**: Weave is focusing on integrating AI into its workflows to enhance relevance in the healthcare sector. This includes automating appointment scheduling and payment collections, which are critical for practice growth and efficiency [4][5][12]. 2. **Market Demand**: SMB healthcare practices are primarily concerned with growing their practice, improving payment efficiency, and increasing profitability. Weave's solutions aim to address these needs through AI-driven automation [4][5]. 3. **Differentiation from Competitors**: Weave emphasizes its deep understanding of the healthcare industry, which allows it to effectively integrate with practice management systems. This is a significant advantage over horizontal AI tools that may not grasp the industry's nuances [7][8]. 4. **Adoption Rates**: There is a broad willingness to adopt AI across different healthcare sectors, but the pace varies. Dental practices, particularly those part of larger organizations, are leading in AI adoption compared to smaller, single-practitioner medical practices [9][10]. 5. **Total Addressable Market (TAM)**: Weave estimates a $3 billion TAM expansion related to scheduling solutions alone, indicating significant growth potential as more workflows are automated [12][13]. 6. **Market Penetration**: Weave has penetrated 10% to 15% of its mature verticals like dental and optometry, suggesting ample room for growth, especially in mid-market segments and specialty medical practices [14][15][20]. 7. **Future Growth Drivers**: Key growth areas include expanding into specialty medical, enhancing payment solutions, and leveraging AI for operational efficiency. The company aims to double its Annual Recurring Revenue (ARR) to $500 million, with operating margins projected between 15% to 20% [18][20][21]. 8. **Capital Allocation**: Weave has over $75 million in cash and is open to strategic acquisitions that align with its growth strategy, particularly those that enhance its capabilities and customer offerings [16][17]. Additional Important Insights 1. **Omnichannel Communication**: The future of AI in Weave's strategy includes developing omnichannel agents that can manage interactions across various platforms, enhancing patient engagement [28][29]. 2. **Customer Experience**: Weave is focused on creating a unified inbox for practices, allowing them to manage all patient interactions in one place, which is expected to significantly improve operational efficiency [28][29]. 3. **Internal AI Initiatives**: Weave is exploring AI applications internally, particularly in customer support and finance, to enhance operational efficiency and decision-making [25][26]. This summary encapsulates the key insights from Weave Communications' FY conference, highlighting the company's strategic focus on AI integration, market opportunities, and growth potential within the SMB healthcare sector.

Financial Data and Key Metrics Changes - Weave reported revenue of $58.5 million for Q2 2025, reflecting a 15.6% year-over-year growth and marking the fourteenth consecutive quarter of exceeding revenue guidance [5][19] - Gross margin improved to 72.3%, up 40 basis points year-over-year and 20 basis points quarter-over-quarter [21] - Free cash flow for the quarter was $4.5 million, indicating strong cash flow performance [6][24] Business Line Data and Key Metrics Changes - The acquisition of TrueLark contributed to revenue and expenses, with over one month of TrueLark's financials included in Q2 results [19] - Gross revenue retention for Q2 was 90%, with net revenue retention at 96%, consistent with historical performance [20] - Specialty medical has become the second largest vertical by customer count, with significant growth in medical aesthetics, primary care, and physical therapy [13] Market Data and Key Metrics Changes - Weave's solutions are increasingly critical for small and medium-sized healthcare practices, with 96% reporting a growing patient base [6] - The company is expanding its reach through authorized integrations with various electronic medical record systems, enhancing patient engagement [14] Company Strategy and Development Direction - Weave aims to position itself as the go-to platform for healthcare practices by integrating AI-powered workflow solutions and enhancing operational efficiency [12] - The company is focused on mid-market partnerships and specialty medical growth initiatives, with targeted investments to drive these areas [22] Management's Comments on Operating Environment and Future Outlook - Management noted that operational efficiency is a key growth lever amid labor constraints and inflationary pressures [7] - The outlook for 2025 anticipates revenue growth in the range of $236.8 million to $239.8 million, with profitability expected to improve in the second half of the year [25] Other Important Information - The company has made significant progress in integrating TrueLark, with joint selling initiatives already underway [18][42] - Weave ranked first in 34 categories in G2's summer 2025 report, reflecting strong customer trust and satisfaction [15] Q&A Session Summary Question: What commonality is seen in specialty medical success? - Management highlighted focus areas such as medical aesthetics and physical therapy, noting that initial average selling prices (ASP) are lower but expected to rise as brand recognition grows [30][32] Question: How has the growth of payments compared to subscriptions? - Payments continue to grow faster than subscriptions, with an increased attach rate within the installed base [36] Question: What is the status of TrueLark integration? - Integration activities are ongoing, with joint prospecting and sales efforts already in place [41][42] Question: What are the dynamics of customer acquisition costs (CAC) in the enterprise push? - CAC for the mid-market team is favorable, with a strong pipeline being built [48] Question: What opportunities exist for price increases? - Price increases will be evaluated on a cohort basis, especially as product value increases [87] Question: How is Call Intelligence adoption progressing? - Call Intelligence is making progress, with ongoing efforts to identify new workflows for customer use [90]

Financial Performance - Weave's TTM Q2'25 total revenue reached $221 million, demonstrating an 18% year-over-year growth[15] - Subscription and Payment Processing revenue for TTM Q2'25 amounted to $204 million, reflecting a 20% year-over-year increase[22] - The company achieved a TTM free cash flow of $131 million, marking a $74 million improvement year-over-year[15] - Q2'25 total revenue was $585 million, up 16% year-over-year[22] - Weave's Q2 2025 Non-GAAP gross margin improved by 40 basis points year-over-year, reaching 723%[22] Customer & Market - Weave serves over 35,000 customer locations[14] - The company estimates its total addressable market (TAM) within Dental, Optometry, and Veterinary (DOV) verticals in the US to be $3 billion[56] - Expanding into specialty medical verticals increases the TAM to $5 billion[56] - The international TAM across 17 target countries is estimated at $10 billion[56] AI and Acquisitions - Weave acquired TrueLark to accelerate AI-powered front office automation[45] - TrueLark books or reschedules over 1200 appointments monthly, leading to significant cost savings for practices[93]

Financial Performance - Weave's TTM Q1'25 total revenue reached $213 million, demonstrating a 20% year-over-year growth[15] - TTM Q1'25 subscription and payment processing revenue also grew by 20% year-over-year, reaching $204 million[14, 15] - The company achieved $2.2 million in TTM Non-GAAP operating income, marking an $11.1 million improvement year-over-year[15] - Q1'25 total revenue was $56 million, an 18% increase year-over-year[22] - Q1'25 adjusted EBITDA was $1 million, a $1 million increase year-over-year[22] Customer & Retention Metrics - Weave serves over 35,000 customer locations[14] - The company reported a Q1 2025 gross revenue retention rate of 91%[22] - Net revenue retention rate for Q1 2025 was 98%, a 2% increase year-over-year[22] Gross Margin - Weave's Q1 2025 Non-GAAP gross margin was 72.1%, reflecting a 170 bps improvement year-over-year[22] Market Opportunity - Weave estimates its total addressable market (TAM) in the DOV (Dental, Optometry, Veterinary) market in the US to be $3 billion[53] - Expanding into specialty medical verticals increases the TAM to $5 billion[53] - The total addressable market including all medical verticals in the US is estimated at $10 billion[53]